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Netz Capital Update: Sept 2011
Hotel Project Loans and Hotels
Construction Financing in India
In spite of RBI policy on tightening credit for the real estate and construction sector, Hotels is a
sector which is still looked at very positively by the Banks.
The Reserve Bank of India vide its circular to all Commercial Banks dated September 9, 2009 has
enclosed guidelines which has removed exposure by Hotels to be classified as Commercial Real
Estates. For a long time the Hotel Industry has been taking up this issue with the RBI and the
Ministry of Finance, Government of India asking for its removal as otherwise it has led to Hotels
being subject to extra provisioning norms as applicable to Real Estate. With this circular the
Hotel Industry would be able to avail of loans from Commercial Banks at lower rates of interest,
and therefore, Hotel projects which are very capital intensive could be constructed at reduced
project costs.
There is also a request to qualify Hotel and SEZ financing as Infrastructure lending which is a
very favorable long term sector in India.
Tourism Industry contributes as one of the largest employment generators in the country at
nearly 40 million jobs.
About Netz Capital Advisors LLP
Netz Capital Advisors is a Financial Advisory and training firm which enables small and medium
enterprises in making informed financial decisions for business expansion relating to the
guidelines of central bank (i.e. Reserve Bank of India RBI ) in India Netz Capital is assisting
several businesses with combined financial needs of over $500 million US Dollars.
Keywords : Hotel Financing, Hospitality Financing , Hotel Construction, India
Contact Information:
Mr.Anil Yadav President-Finance Netz Capital Advisors LLP
Email: anil at netzcapital dot com
Phone : +91 932484716 /91-22-28631151
http://www.netzcapital.com
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